What Are The Limitations of Trademark Law

The Trademarks Act 1999, protects well-known trademarks in two ways – an action against registration of similar marks and action against misuse of well – known marks. While having a trademark can provide many advantages and privileges, it is subject to some limitations. The limitations arise due to the inherent limitations of the nature of Trademarks.

Design or Functionality Limitation

This limitation arises from the very fact of what can be trademarked and what cannot be. This limitation implies that the product must be non – functional; that is, it must not have any purpose or function to it. For example, a pen design can be trademarked, but if there is a special feature of cushion grip or any functional design that enhances usability, it cannot be trademarked as it can be used by organisations to limit competition by registering functional elements and pursuing the trademark rights against a competitor.

Geographical Area Limitation

The Trademark Act applies in the country or geographical area that it has been imposed. Hence if a product is trademarked in the USA, it can be replicated in India if the organisation has not obtained the trademark registration in India as well. Some trademarks are transactional and hence apply to certain unions or committees. To obtain multiple country protection, the organisation has to apply for a separate international application.

Fair Use Limitation

The Fair Use doctrine is found under Copyright Laws. The doctrine states that parts of copyrighted material can be used without the permission of the owner. This can be used for education, research, parody, etc. Under the Trademark Law, this applies to situations wherein common words are used every day in a distinctive context owing to which it cannot be trademarked. Even if the product is fanciful, the owner might not be able to enforce rights if it is used in a manner qualifying as nominative fair use.

Under Section 30(2)(d) of Trademark Law, in order to claim the defence of nominative fair use, the user must establish that it is crucial for him/her to use the registered mark to identify the product in the market.

Parallel Importation

Parallel imports mean the acquisition of product/goods from the rightful owner and selling it for a lesser price via unaccredited channels in the market. Trademark Law cannot protect against parallel importation. It is considered legal and hence if a trademarked product/goods are imported without the consent of the owner and sold for a lesser price, the owner has no rights on the subsequent sale, his rights are exhausted on the first sale.
Trademark registration provides benefits to an organisation like recognition, adding value and also rights against infringement. However, the limitations exist, and organisations must check which of the limitations apply and seek professional help.

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